A bill to amend the Internal Revenue Code of 1954 to provide for a 30 percent credit, in lieu of an exemption, for the interest on certain governmental obligations.

Allows an income credit, under the Internal Revenue Code, equal to 30 percent of the interest on: (1) the obligations of a State, a territory, or a possession of the United States, or any political subdivision of any of the foregoing, or of the District of Columbia; and (2) the obligations of the United States (with exceptions specified in this Act).

Excepts industrial development bonds from such provision, except as provided in this Act for residential real property for family units, sports facilities, airports, docks, mass commuting facilities, parking facilities, sewage or solid waste disposal facilities, air or water pollution control facilities, industrial parks, and issues for $1,000,000 or less which are to be used for acquisition, construction, or improvement of property subject to the depreciation allowance.

Allows the small-issue face amount to be $5,000,000, under specified conditions, which shall take into account capital expenditures to replace property destroyed by disasters.

Excepts arbitrage bonds from such tax credit provision.